Need Advice

[BSBRose21]

14 mths left on loan

 Owe $5890

Trade In Value $3500

Credit score around 720

not sure on how they figure dti for car but I have $750 in mortgage (joint account), and ATV loan 136/month. $35,000 yearly gross

I am debating  whether to purchase a vehicle that is 2005 or newer for around $12000 or vehicle for under $7000. I currently have a 21% interest rate because I had a 535 score three years ago.  Advice??

[Anonymous]

I would look toward new at zero percent.

[Anonymous]

No chance you want to drive a car without a payment for a year or two?

I'm looking forward (for me) to having my loan paid off and stash the cash for a couple years.

[Anonymous]

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@Anonymous wrote:

No chance you want to drive a car without a payment for a year or two?

I'm looking forward (for me) to having my loan paid off and stash the cash for a couple years.

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I assumed a 48 month loan of a "bad credit" car- if his scores have improved that much it might be nice to roll the negative to no interest rate and have a reliable warrantied vehicle at your diposal- at a payment probably cheaper then what the op is currently paying.

[BSBRose21]

My main reason for to trade is to not have a $400 payment a month for a car that has no warranty on it and 110,000 miles.  Also, I will be able to continue building credit.

[Anonymous]

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@BSBRose21 wrote:
My main reason for to trade is to not have a $400 payment a month for a car that has no warranty on it and 110,000 miles.  Also, I will be able to continue building credit.

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Pretty much what I figured. Wow, did I call that or what.

At 110,000 miles i doubt you will get 3.5K for you vehicle.

I would save up as much as you can for a DP, you will need it for the negative equity and go for a nice zero percent loan.

[BSBRose21]

What if I am unable to be approved for 0%?  Should I still go with a new vehicle or try a used newer (2004 or newer) or try for a used older (2000-2003) with low miles? This is so confusing.

[Anonymous]

I honestly don't think you will have a problem getting approved if your score is a true 720 and you come to the table with a downpayment.

The problem you have is you need to sop up the negative equity on your current car. Getting a new car at a MSRP discount price (think a dealerships internet pricing special of 100 over invoice) and combining that with any rebates and Zero percent, plus whatever downpayment you can muster can put you in a better ball park.

Used cars do not sop up negitve equity as well as new (I mean some do, but thats a you have to look situation), so just right out the gate you need  stronger DP to get the deal bought.

At this point any interest rate below 8% is good.

[BSBRose21]

Thanks for the info! My fico score is a 720 on Transunion which most banks around here pull.  How much of a downpayment would you think I would need.  I would like to keep it around $1000, if possible.